Houston-based NRG Energy has opened its first new power plant in more than 10 years, a 456-megawatt natural gas facility funded in part by the state’s Texas Energy Fund. The plant comes online as Texas faces potential record-breaking energy demand driven by a wave of data center construction.
The new facility, located at NRG’s TH Wharton Generating Station in northwest Harris County, includes two natural gas generation units capable of powering more than 100,000 Texas homes during peak demand. The plant can begin generating electricity within 30 minutes and is expected to operate approximately 1-2 hours per day on average, according to Houston Public Media.
“If something happens and the day is a little bit stronger in terms of temperature, or a cold front comes in a little bit faster, these units get called on to be there for the grid,” said Matthew Pistner, president of NRG Wholesale.
The Public Utility Commission of Texas granted NRG a $216 million loan through the Texas Energy Fund at a 3% interest rate, covering approximately 60% of the project’s projected $360 million cost. The $10 billion fund was established through state legislation and a voter-approved constitutional amendment in 2023 to improve power grid reliability. NRG has received more than $1 billion in loans through the fund to date, according to the Houston Chronicle.
Texas Gov. Greg Abbott praised the opening. “Texas is on pace to build the reliable power generation needed to support our high-growth economy and ensure Texans have the electricity they need every day,” Abbott said in a statement.
The plant arrives at a critical moment for Texas. The state is experiencing an AI-driven data center boom with at least 248 projects planned statewide, according to a Texas Tribune analysis. These facilities require massive amounts of electricity, putting new pressure on the state’s power grid. Texas has become one of the national leaders in digital infrastructure, with cheap land, available power, and a business-friendly regulatory environment attracting massive investment from companies including Amazon Web Services, Google, and Meta.
The Texas Energy Fund was created to improve grid reliability following the 2021 winter storm that left millions without power. Most of the fund’s disbursements have been dedicated to building natural gas plants, which can ramp up quickly during periods of peak demand. NRG’s new facility exemplifies this approach, with the ability to start generating electricity within 30 minutes.
Pistner acknowledged that the new plant’s utilization could increase as data centers come online. “Will these plants run more with data centers coming on? I think time will tell,” he said. The facility joins the grid as ERCOT, the state’s grid operator, forecasts potential record energy demand in the coming years, driven by population growth, industrial expansion, and the unprecedented electricity requirements of AI computing infrastructure across the state.
